Investing: Equities and Bonds Flashcards
1
Q
What are the different asset classes?
A
Equities, bonds, saving accounts, property and alternative investments (hedge funds, stamps, wine)
2
Q
What are bonds?
A
Long-term loan contracts issued by companies or by government
3
Q
What is the nominal value?
A
Its base value and remains fixed
4
Q
The coupon rate on a bond is fixed, so what must change in the price to reflect this?
A
Changes in market interest rates, supply/demand for bonds, inflation, changes in default risk
5
Q
What is a credit rating?
A
Seeks to measure the riskiness of debt of a specific organisation or country
